Brazil: Current account deficit shrinks in Q2
July 26, 2011
In June, the monthly current account balance incurred a deficit of USD 3.3 billion, which was down from the USD 4.1 billion tallied in May. The trade balance remained in surplus in June totalling USD 4.4 billion, while the deficit in services and income reached USD 7.8 billion. As a result, the 12-month current account deficit stood at USD 49.0 billion in June, down from the USD 50.9 billion observed in May. On a quarterly basis, the current account deficit shrank from USD 14.6 billion in the first quarter to USD 10.9 billion in the second. Persisting current account deficit reflects the gap between domestic investment and saving in the economy, as high interest rates and a solid pace of economic growth attract inflows of foreign investment.